Porter’s Diamond of National Competitive Advantage

Response #1 (Nancy)

Mergers or Acquisitions (M & A) – this publication: Mergers and acquisitions covers all aspects of mergers and acquisitions. Beginning with the pre-combination phase (the period between the deal’s announcement and the legal approval to start integration planning), Combination phase (more often than not dominated by political wrangling) and Post-combination phase (critical that both sides are involved in the strategic logic, understanding their roles and responsibilities.  Joining two wholly independent organizations requires strategic management of organizational, cultural, psychological and transition management challenges.

M & A is a way for business to enhance their competitiveness and generate transformation change as the marketplace continues to globalize.  This enables companies to achieve economies of scale, diversity and enter new markets.

M & A is discussed in our text on page 197 – 198.  Like many business transactions there are pros and cons that must be addressed.  A few positive results could include obtaining valuable resources, consolidate (forcing other market players to merge), enter new market segments and offer the opportunity to synergize core competencies, shared activities and increase market potential (Dess, et.al., 2014).  Negative results can include high cost of takeover premiums, competition can copy synergies acquired through acquisition, managerial egos deter sound business decisions and managing intended cultural benefits (Dess, et. al., 2016).

     Transnational Strategy – this eBook: Transnational Strategy  provides a quick synopsis to get anyone up to speed on the critical elements of global, multidomestic and transnational strategy.  Major hurdles that have taken place over the last decade include; landscape of the global economy has dramatically changed, technology has taken over the way business is conducted and the inherent desire to be different in the global economy.  For this discussion, the focus is on transnational strategy, how best to determine the middle ground between a multi-domestic strategy and a global strategy.  An organization entering a transnational market must be able to balance efficiency with local preferences.  There is a great importance and often-overlooked strategy in a transnational market is how to tailor country-specific strategies to target consumers in these countries.

Transnational strategy as discussed in the text on pages 235 – 236 has a goal of optimize global competitiveness for the greater good of the newly formed organization.  Several things to consider include but are not limited to:  thoroughly vetting the location (perfect location does not ensure quality and cost factors), promote knowledge transfer as quickly as possible (keeping both sides informed to encourage this transfer), what is the viability of economies of scale and how quickly can the incoming team adapt to the local team (Dess, et.al. 2016).

     Porter’s Diamond of National Competitive Advantage – this article: Porter’s Diamond of National Competitive Advantage discusses the competitive theory that explains the achievement of a country’s industrial and a firm’s competitive advantage.  The re-formation of the Porter’s Diamond model assists in meeting the needs in trends of international and sustainable development.  It is critical to note that sustainable development concept is clearly connected with competitiveness.

In the text this is discussed on page 218 – 219.  As the world continues to shrink globally, many organizations are pursuing international expansion.  Increasing the sizes of markets is an obvious way to gain collateral for expansion.  Any time a market expansion is executed, notwithstanding globally, scale of operation is exponentially increased providing larger revenues.  Proper execution is a win-win (Dess, et.al.2016).